Serco Group shows relatively strong fundamentals and is coming back to attractive price.

From a fundamental viewpoint, the company seems undervalued relatively to its peers with a EV/Sales of 0.67. In the recent months, the earnings estimates for the next year are regularly revised upward by analysts.

With an EPS estimated at 39.21 GBp for this year and 41.87 GBp for the next year, Serco Group is currently paid 13.99 and 13.1 times the results.

Technically, the security fell sharply for several weeks. This fall has lead Serco Group towards the GBp 526 support area which could become useful as a stepping stone for a technical rebound. The target of this bullish trend is the GBp 563 resistance. Even though moving averages are still in a bearish trend, the oversold situation could encourage a renewed interest in Serco Group.

Thanks to the technical pattern and Serco Group’s strong fundamentals, active investors can take a long position above GBp 544.5. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The goals will be fixed at GBp 563 in a first time and then at GBp 602.
However, a bearish trend would regain the upper hand if the security crosses GBp 536.